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AMP upbeat trading

“That is the big challenge for the country – it is not the demand side but the supply side that needs addressing.”: AMP chief Craig Meller. Photo: Ben Rushton/Fairfax Media via Getty Images “That is the big challenge for the country – it is not the demand side but the supply side that needs addressing.”: AMP chief Craig Meller. Photo: Ben Rushton/Fairfax Media via Getty Images

“That is the big challenge for the country – it is not the demand side but the supply side that needs addressing.”: AMP chief Craig Meller. Photo: Ben Rushton/Fairfax Media via Getty Images

“That is the big challenge for the country – it is not the demand side but the supply side that needs addressing.”: AMP chief Craig Meller. Photo: Ben Rushton/Fairfax Media via Getty Images

Financial services group AMP Ltd has provided an upbeat trading update for the third quarter to September 30, 2014, more than doubling cash flows into its wealth management arm and retaining more policy holders in its life insurance division.

“The focus on Asia continues to deliver results and the performance of our insurance business is in line with guidance,” Mr Meller said.

Australian wealth management net cash flow for the quarter was $476 million, more than twice the $206 million recorded in the same period last year.

Total assets under management grew to $105.2 billion, up from $103.8 billion for the June quarter.

Average assets under management also increased by 2.6 per cent.

In AMP’s Australian wealth ­protection division, which sells life insurance, the annual premium ­in-force grew by 6.2 per cent from the previous quarter to $1.935 billion.

The growth was primarily driven by a 4.6 per cent increase in individual lump sum insurance and a 16.6 per cent increase in group risk insurance as a result of premium rate increases.

The rate of policy lapse in AMP’s insurance business was in line with best estimate assumptions provided in previous guidance.

The calculated cost of underwriting policies, known as “claims experience”, also continued to perform ahead of expectations.

Initial analyst reactions to the trading update were mostly positive.

“The trend of improving net flows and recovery in life bodes well for AMP’s outlook,” said Morgan Stanley analysts led by Daniel Toohey.

“Markets are driving a cyclical recovery and investors have over-reacted to risks to the life business,” he said.

Among highlights noted by the Morgan Stanley analysts, AMP’s wealth platforms showed a 79.2 per cent increase in inflows from the previous corresponding period. This included a particularly strong performance from the North platform.

Morgan Stanley also noted strong organic growth in the self-managed super fund sector, which almost doubled.